DCIT, Circle - 9, Kolkata, Kolkata V. Damodar Valley Corporation, Kolkata

ITA 180/KOL/2011

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 62088 (ITAT-KOLKATA)
• Duration Of Justice: 1 year(s) 2 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-04-2012
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: misc
• Appeal Filed On: 31-01-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: NIRAJ KUMAR
• Assessee Lawyers: D S DAMLE PER PRAMOD KU

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH: KOL KATA [BEFORE SHRI PRAMOD KUMAR, A.M. & SHRI MAHAVIR SIN GH, J.M. ] I.T.A. NO.180/KOL/2011 ASSESSMENT YEAR :1987-88 D.C.I.T.,CIRCLE-9, KOLKATA VS- DAMODAR VALLEY CORPORATION DVC TOWERS, VIP ROAD KOLKATA 700 054 (PAN:AAECD 0541M) ( APPELLANT ) ( RESPONDENT ) DATE OF CONCLUDING THE HEARING : 30.03.2012 DATE OF PRONOUNCING THE ORDER : 20.04.2012 APPEARANCES : FOR THE APPELLANT : SHRI NIRAJ KUMAR, CIT,DR : FOR THE RESPONDENT : SHRI D.S.DAMLE O R D E R PER PRAMOD KUMAR 1. BY WAY OF THIS APPEAL, THE ASSESSING OFFICER HAS CHALLENGED CORRECTNESS OF CIT(A)S ORDER DATED 23 RD MAY 2008, IN THE MATTER OF ASSESSMENT U/S.143(3)/263/254 OF THE INCOME TAX ACT, 1961 FOR THE ASSESSMENT YEAR 1997-98, ON THE FOLLOWING GROUND:- 1. FOR THAT THE LD. CIT(A)-VIII, KOLKATA, WAS NOT J USTIFIED IN LAW AS WELL AS IN THE FACTS AND CIRCUMSTANCES OF THE CASE, IN DELE TING THE INCREASED TARIFF ON ACCOUNT OF POWER SALES AMOUNTING TO RS.2,68,41,177/ -. 2. THE APPEAL IS TIME-BARRED BY 906 DAYS BUT THE AS SESSING OFFICER HAS MOVED A CONDONATION PETITION PRAYING THAT THE DELAY BE CO NDONED. THE REASON GIVEN FOR THE DELAY IS THAT IN THE ABSENCE OF THE CLEARANCE O F THE COD, THE APPEAL WAS DISMISSED BY THE TRIBUNAL AND AS SOON AS THE ASSESS ING OFFICER OBTAINED THE CLEARANCE OF THE COD, HE HAS AGAIN FILED THE APPEAL . THE LD. COUNSEL FOR THE ASSESSEE DID NOT OPPOSE THE CONDONATION PETITION. I N VIEW OF THE DISCUSSION AND 2 IT A NO.180/KOL/2011 DAMODAR VALLEY CORPORATION ASSESSMENT YEAR: 1987-88 HAVING BEEN SATISFIED WITH THE BONA FIDES OF THE DE LAY IN FILING THE APPEAL, WE CONDONE THE DELAY AND PROCEED TO DISPOSE OF THE APP EAL ON MERITS. 3. THE SHORT ISSUE REQUIRES OUR ADJUDICATION IS WHE THER OR NOT THE CIT(A) WAS JUSTIFIED IN DELETING THE ADDITION OF RS.2,68,44,17 7/-. THIS AMOUNT REPRESENTED INCREASED TARIFF ON ACCOUNT OF POWER SALES, EFFECTI VE FROM 01.12.1982 REALISABLE FROM WEST BENGAL STATE ELECTRICITY BOARD. THE AOS CONTENTION WAS THAT SINCE THE ASSESSEE WAS MAINTAINING ITS BOOKS OF ACCOUNTS ON M ERCANTILE BASIS AND INCOME ACCRUED FOR THE FINANCIAL YEAR 1986-87, THE AMOUNT OUGHT TO HAVE INCLUDED IN ASSESSEES INCOME FOR THIS ASSESSMENT YEAR. THE QUE STION OF ASSESSABILITY OF INCREASED POWER TARIFF CAME UP FOR CONSIDERATION IN THE ASSESSEES OWN CASE FOR THE ASSESSMENT YEAR 1984-85 WHEREIN IT WAS HELD THAT ME RELY BECAUSE THE CLAIM IS MADE FOR HIGHER TARIFF, THE RIGHT TO RECEIVE INCOME DOES NOT ARISE AUTOMATICALLY AND THEREFORE, THE INCOME ON ACCOUNT OF ENHANCED TARIFF COULD NOT BE BROUGHT TO TAX. THIS DECISION OF THE CIT(A) WAS ACCEPTED BY THE REV ENUE AND HAS THUS RECEIVED FINALITY. IT IS IN THIS BACKGROUND THAT THE CIT(A) HAS DELETED THE IMPUGNED ADDITION BY OBSERVING THAT THE AMOUNT HAS BEEN BROUGHT TO TA X IN THE ASSESSMENT YEAR 1992- 93 IN WHICH RIGHT TO RECEIVE THE MONEY AND THAT THE EARLIER DECISION OF THE CIT(A) ON THIS ISSUE HAS REACHED FINALITY. WHILE DOING SO, THE CIT(A) OBSERVED AS FOLLOWS: 8. I HAVE CONSIDERED SUBMISSIONS OF THE A/R AND PER USED THE IMPUGNED ORDER. I HAVE ALSO CAREFULLY GONE THROUGH THE NOTES IN THE AUDITED BALANCE SHEET AND THE APPELLATE ORDERS PASSED ON THE SAME I SSUE IN THE APPELLANTS OWN CASE FOR A.Y.1983-84, 1995-96 AND 1996-97 RESPE CTIVELY. I HAVE ALSO PERUSED THE DECISION OF THE SUPREME COURT: IN THE C ASE OF GODHRA ELECTRIC SUPPLY CO.LTD. VS. CIT (225 ITR 746) WHICH INVOLVED ANALOGOUS FACTS IT IS NOT IN DISPUTE THAT THE REVISION IN TARIFF, PROPOSE D BY THE APPELLANT EFFECTIVE FROM 01.02.1982, WAS NOT ACCEPTED BY WBSEB AND THE MATTER WAS REFERRED FOR ARBITRATION. EVEN IN THE EARLIER ACCOUNTING YEA RS THE APPELLANT HAD NOT RECOGNISED INCOME FROM REVISION OF TARIFF. IN A.Y. 1983-84 THE A.O. HAD MADE ADDITION IN RESPECT OF REVISION IN TARIFF, NOT ACCOUNTED IN THE BOOKS. THE CIT(A)VII CALCUTTA BY HIS ORDER DATED 04.02.198 8 DELETED THE ADDITION. I FURTHER NOTE THAT THIS FINDING OF C1T(A) WAS NOT CHALLENGED BY THE DEPT IN SECOND APPEAL. THUS, ON THE SAME FACTS, ADDITION MA DE ON ACCOUNT OF 3 IT A NO.180/KOL/2011 DAMODAR VALLEY CORPORATION ASSESSMENT YEAR: 1987-88 DISPUTED TARIFF REVISION WAS DELETED BY THE CIT(A). ON SIMILAR FACTS ADDITIONS WERE MADE IN A.Y. 1995-96 AND 1996-97 ALS O WHICH WERE DELETED BY THE CIT(A) I, KOLKATA IN THE APPELLATE ORDER DAT ED 26.10.2004, BY FOLLOWING THE RATIO LAID DOWN IN THE DECISION OF TH E SUPREME COURT IN THE CASE OF GODHRA ELECTRIC SUPPLY CO.LTD. VS. C1T (225 ITR 746). THE DECISION OF THE APEX COURT IN 225 ITR 146 IS SQUARE LY APPLICABLE BECAUSE DURING THE F.Y. 1986-87 WBSEB HAD NOT ACCEPTED TARI FF REVISION AND THEREFORE ASSESSEES RIGHT TO RECEIVE INCREASED TAR IFF WAS INCHOATE. THE REVISION IN TARIFF WAS ACCEPTED BY WBSEB IN THE SUB SEQUENT YEARS AND INCREASED TARIFF RELATING TO F.Y.1986-87 WAS PAID B Y WBSEB IN F.Y.1992-93 WHICH WAS ALSO ASSESSED AS INCOME IN A.Y.1993-94 WH ICH HAS BECOME FINAL. IN THE CIRCUMSTANCES, THE ASSESSMENT OF RS.2,68,41, 177/- IN A.Y.1987-88 HAS RESULTED IN DOUBLE ASSESSMENT OF THE SAME INCOME WH ICH IS NOT PERMISSIBLE IN LAW. CONSIDERING THE TOTALITY OF THE FACTS I HOL D THAT A.O. WAS NOT JUSTIFIED IN ASSESSING RS.2,68,41,177/- AS APPELLANTS INCOME FOR A.Y.1987-88 AND ADDITION IS ACCORDINGLY DELETED. 4. THE ASSESSING OFFICER, BEING AGGRIEVED, IS IN AP PEAL BEFORE US. 5. HAVING HEARD THE RIVAL CONTENTIONS AND HAVING PE RUSED THE MATERIAL ON RECORD, WE ARE OF THE CONSIDERED VIEW THAT ONCE IT IS THE ACCEPTED PAST HISTORY OF THE CASE THAT THE AMOUNT RECEIVED ON ACCOUNT OF ENH ANCED POWER TARIFF CANNOT BE BROUGHT TO TAX MERELY ON THE GROUND THAT THE BILL I N RESPECT OF THE SAME HAS BEEN RAISED AND IT IS ALSO NOT IN DISPUTE THAT THE AMOUN T IN QUESTION HAS BEEN OFFERED TO TAX IN THE ASSESSMENT YEAR 1992-93 AND HAS BEEN ACC EPTED BY THE AO AS SUCH, THE GRIEVANCE OF THE ASSESSING OFFICER IS DEVOID OF ANY LEGALLY SUSTAINABLE MERITS. WE, THEREFORE REJECT THE SAME AND DECLINE TO INTERFERE IN THE MATTER. 6. IN THE RESULT, THE APPEAL FILED BY THE ASSESSING OFFICER IS DISMISSED. THIS ORDER WAS PRONOUNCED IN THE OPEN COURT ON 20 TH APRIL, 2012. (MAHAVIR SINGH) (PRAMOD KUMAR) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 20 TH APRIL, 2012 4 IT A NO.180/KOL/2011 DAMODAR VALLEY CORPORATION ASSESSMENT YEAR: 1987-88 COPY OF THE ORDER FORWARDED TO: 1. DAMODAR VALLEY CORPORATION, DVC TOWERS, VIP ROAD, K OL 700 054 2 D.C.I.T.,CIRCLE-9, KOLKATA 3. THE CIT(A), KOLKATA 4. CIT, KOLKATA 5. DR, KOLKATA BENCHES, KOLKATA TRUE COPY, BY ORDER, ASSTT. REGISTRAR , ITAT, KOLKATA TALUKDAR(SR.P.S.)